iPhone is a revolutionary gadget. With its Wifi and a whopping 8gig memory, these features are enough to communicate effectively through the net and bombard somebody's ear with thousands of genres of music. However, these great features have great opportunity costs.
Let's take Apple's iPod as an example. What is going to happen to iPod sales (i.e., iPod Nano, video and the micromini version)? These Apple products will probably become irrelevant to a big chunk of Apple's target iPhone market upon its release. Consequently, a possible billion dollar loss for Apple might be triggered upon the introduction of the revolutionary gadget in the market.
Nonetheless, Apple has different options to mitigate the possible loss.
New Marketing Strategies
Offering its iPhone to a different market segment to minimize competition for its iPods would be a great option. A key step to mitigate a huge loss of profit would be if Apple offered the iPhone to businessmen and other high income earners, while marketing its iPods to teenagers or fashinistas (this does not mean, though, that there should be a huge gap in the prices of the iPhone and iPod). This way, sales generation for iPods would still be effective. Thus, additional but significant profit would still be realized by Apple. Plus, the good thing about this strategy is it provides distinction or identity to Apple's products.
Discriminating the price of the iPhone from the iPod would also be considered a great option. Apple could take the path of letting the iPhone be a high end product by making its price high and letting the iPods become a cheaper option. But, in this case, the price of the iPhone should be able to cover up for the lower price of the iPods so as not create a loss of profit for Apple. In this strategy, illusions of making the iPod a very affordable product for consumers would be enabled without revealing the true essence of the strategy.
Or Apple could just go for the easy way out by selling all the necessary rights and production facilities of its iPods and focusing more on the production and promotions of its iPhone and its other products, which are not direct competitors of the iPhone. This strategy is a radical one and might, indeed, significantly affect Apple's stock price.
